Alkermes Plc (ALKS)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	74.86	101.30	98.58	94.18	88.27	71.18	72.59	75.65	76.97	70.31	67.13	68.06	68.89	65.62	65.63	66.01	60.66	78.46	71.82	64.74
Days of sales outstanding (DSO)	days	90.50	89.80	89.80	67.74	74.00	78.53	84.58	88.87	95.60	83.77	77.12	76.60	98.37	94.17	99.36	85.76	97.27	83.54	75.39	76.30
Number of days of payables	days	18.68	19.63	53.03	36.58	31.09	32.23	32.44	15.19	13.94	14.04	17.28	12.18	25.53	17.45	15.82	17.76	22.21	52.92	31.42	25.57
Cash conversion cycle	days	146.69	171.46	135.35	125.33	131.18	117.47	124.74	149.33	158.64	140.04	126.98	132.48	141.73	142.34	149.17	134.01	135.72	109.09	115.80	115.47

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 74.86 + 90.50 – 18.68
= 146.69

The cash conversion cycle of Alkermes Plc has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle represents the time it takes for a company to convert its resources invested in inventory into cash flow from sales.

The trend indicates that Alkermes Plc had a relatively stable cash conversion cycle in the range of 115 to 135 days in 2020 and 2021. However, there was an increase in the cycle time in the latter part of 2021, peaking at 158.64 days by December 31, 2022. This suggests a delay in converting inventory and receivables into cash during this period.

In 2023, there was a significant improvement in the cash conversion cycle, with a decline to 117.47 days by September 30, 2023. This trend continued into 2024, indicating better management of inventory and receivables, with the cycle time fluctuating in the range of 125 to 171 days.

Overall, Alkermes Plc should focus on optimizing its cash conversion cycle by efficiently managing its inventory levels, speeding up the collection of receivables, and effectively managing its payables to ensure a healthy and sustainable cash flow position.